There is a lot of confusion about who actually "invented" the HD-based MP3 player, and who copied who.

Here is a time line of when major players were introduced.

October 26, 1999 - Compaq Personal Jukebox

The Personal Jukebox, or PJB, was the first commercially available HD-based MP3 player. It was created as a prototype personal audio appliance by Compaq's Systems Research Center (SRC) and Palo Alto Advanced Development group (PAAD). The PJB project started in May 1998, and the PJB-100 product shipped in November 1999.

The PJB-100 was manufactured by HanGo Electronics and sold by Remote Solutions.
(press release)